UK games devs face potential market failure

UK's games industry employs nearly 30,000 people, developers call for 20% tax breaks from government

A new market report of the UK games development industry claims that the government needs to offer a 20 per cent tax credit to help developers avoid bankruptcy.

The Games Up campaign's Games Impact report will make for interesting reading in the Treasury, as it claims that UK games devs compete "on uneven international playing fields" due to the lucrative tax breaks available to their counterparts in Canada, France, Australia and the US.

"As a result, global companies are beginning to look at subsidised territories for their next partners or studios despite Britain's reputation as an industry-leading talent pool."

Games to follow film industry?

Games Up wants a 20 per cent production tax credit for UK games developers from the government, along the same lines as moneys made available to the UK film industry.

There are over 10,000 games developers currently working in the UK, with the industry in total employing 28,100 people and contributing over a billion pounds per annum to the UK's Gross Domestic Product and £420 million for the Exchequer in tax revenues.

The report adds that the UK's games industry "invests 14 per cent of its turnover in R&D, some of which spills over into other sectors; games developers are clustered around eight hubs in the UK, the effect of which is to enhance productivity within the industry; and the video games sector generates cultural spillovers, including strengthening the UK's brand image, its record for technological achievement and the promotion of tourism".